Membership Fees Lift Costco as Revenues Fall Short of Estimates

Costco Wholesale Corp. (NASDAQ: COST) reported first-quarter fiscal 2013 results before markets opened this morning. The big-box club store posted diluted earnings per share (EPS) of $0.95 on revenue of $23.2 billion. In the same period a year ago, Costco reported EPS of $0.73 on revenue of $21.2 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.93 and $23.67 billion in revenue.

The company noted that first-quarter EPS a year ago was negatively affected by $0.07 a share in one-time items.

Excluding the impact of fuel sales and currency exchange rates, Costco’s same-store sales rose 6%. In late November the company announced a $7 per share special dividend, totaling almost $3 billion, to be paid to shareholders by the end of this year, ahead of a possible rise in taxes on dividends.

The company did not publish any guidance, but consensus estimates for the second fiscal quarter call for EPS of $1.07 on revenues of $24.94 billion. For the full fiscal year, EPS is expected to come in at $4.49 on revenues of $105.87 billion.

As usual, Costco’s membership fees provide more than 100% of the company’s profit. The fees brought in $511 million in the quarter, and net profit totaled $416 million. The return was narrower than in the same quarter a year ago, though, when the store took in $447 million in membership fees and posted net income of $320 million.

Shares are up fractionally in premarket trading this morning, at $98.65 in a 52-week range of $78.81 to $105.97. Thomson Reuters had a consensus analyst price target of around $105.00 before today’s results were announced.